>> you know, it's volatile. it's not too much of a move, down 2%, not a big move for apple. not far off. i don't know if that helped. liz: here we go, 20 seconds to go on a day, where, listen, every minute the stocks move higher on the dow jones, they pull back, but they were very shallow moves. some 79 times we crossed the flat line. it's probably more than that at this point, but it looks like the bears win this one, at least for the dow, s&p, and nasdaq, russell 2,000 with a gape at the moment. david: gold, everybody talked about it. double digit drop settling at the lowest level in a month. below that 1700 mark, and people wondering if is the time to buy in or start of something bigger. we'll watch. liz: a fixed live camera in egypt now with thousands of people taking to the streets all across the country today

protesting president morsi's decree to express its powers. despite there, there was a nice pop, a move of 31 cents, about 2.5%. it tracks egyptian companies that trade in egypt. david: egypt, the fiscal cliff, so much uncertainty. where do you put your money? go to the big caps. look at the winners among the big cats. not huge, but this is where people are puttinggtheir money. they want it in safety. they are not putting it in gold. if you have to be in the market, go to the big cats. that's what's happening. liz: president obama discussing the fiscal cliff, and, plus, speaking live to the iowa governor, his state facing a double whammy if we go over the cliff. what compromises he'd love to see come out of washington, and how he believes they could reach them. this is a guy who deals with the democratic senate, so, really,

he knows how to cross the aisle to make it happen. david: somebody else you know about, with all the talk about tax increases, the idea of a simple flat tax dead? we'll see. forbes doesn't think so. there's a news conference along with washington lawmakers to push for the flat tax. he joins us later this hour. liz: first, what drove the marketings for today's data download. stocks ending lower, struggling for direction most of the day, unable to hold gains trading lower. i think it was 79 times. health care and industrials were today's top performing sectors and telecomo lagged. the euro extending the gains versus the dollar, rallying to a near seven week high against the green back after greece announced its debt buy back terms. euro rose to a $1131. that's high historically. action in the metals. silver, platinum, all sinking

more than 1%. silver was today's biggest loser dropping nearly p 3% to settle at $32.81 an ounce. david: markets hopping, but the next trader says investor participation is shifting. in chicago, larry, the key question here is what happens when the market gets off its hind legs and moves? move up or down? >> it all depends on what happens with the fiscal cliff. right now, there's boehner yelled out by his own party, the conservative part of the wing, and also the left. he's in a really, really tight spot and an ultimate binary trade. if something good happens, we'll rocket higher. if something bad happens, expect the worst right now. that's the thing right now. it's a yes or no trade. liz: congressional know it all at fox news calls it rrpublican on republican violence.

hard to get a deal in the own party, special interests, the markets, whatever happens, we want to make money. where did you see the flows today? >> -- >> just a sec. we picked through the numbers, the stock is falling, of course, i'm sure making the shorts happy. clearly, looking at the stock, again, it had been up for the past two and a half weeks, but it's gotten hammered since the six month high reached six months ago. larry, quickly, though, where were the flows today that you saw? >> not many at all. i think people are talking about putting money into financials and materials and out of energy and utilitities. not a lot of rotation. right now, liz, the correlation of sectors are very, very high, and rising every day, and until we get clarify from washington, expeet that to continue. david: okay. by the way, larry, we have the numbers after hours on pandora because it's a real hit this

stock is taking. there's a huge drop right now, over 10% drop. ended at 945 and now trading at 767. that's the bid after hours. any indication of something more general, maybe in terms of internet music, ect.? people thought of getting in there including apple. >> yeah, i think they were. i think it was dead wrong. volatility, pricing in a 3% 4% move, there was a lot of bullish trades put in the market in the last couple days. this is a classic example of the market getting it wrong, and, perhaps this is a good buying opportunity because of the apple news. see what happens. liz: let me tell you, the news right now is that they say for full year 2013, they'll swing to a loss of six pennys, nonetheless, they have listener hours up 67% year over year, but, clearly, that's not what the market is looking at right now. let's look at pandora right now.

justin? robert, you got the numbers. >> yes, indeed, liz. you pointed it out, the forecast, starting there, the loss, the expectation for the fourth quarter, six to nine cents a share. analysts looking for a penny a share in the current quarter. a disappointment there with a loss on the operating basis. revenue numbers, disappointment here. $123 million, and the estimate is $130 million. it's not erasing good will. they earned a nickel a share, estimate for a penny. revenue exceeding expectations $120 million, beating $117 million. you mentioned the total listener hours grew by two-thirds compared to a year ago. 3.5 billion hours there, users reaching 59.2 million, a 50% increase, but that's the forecast for the current quarter where shares are tumbling.

liz: crushed, down 20 #%. they don't care they beat on the revenue level, but that the outlook for 2013 is a loss here, a stunning move. can't do that in the newer businesses. >> no, you clearly can't, but maybe this is a very good buying opportunity. as you said, most analysts look for the net listening hours, and that went up exponentially. they are worried about royalties being paid, but so is the competition. perhaps ii's a good time to get in with everyone selling. david: by the way, we have to mention the shares have been up about 20% over the last couple weeks, but what's happening today has totally wiped out the gains, even though they were up 20%, negative for the year. you'd go into a stock that has been negative for the entire year down 0% in one day, larry? >> well, keep in mind, i'm an old commodities trader. i love momentum. when everybody's going one way,

that's the perfect time to tip the toe in the water and buy. i mean, fundamentally, i like pandora, i'm subscribed, a great service. when everybody sells, no good reason to buy it other than everyone is selling it liz: larry, we love your perspective as a trader. thank you so much. david: talk about the competitive landscape. look in the beltway. republicans can't seem to get along together. what about democrats and republicans together? a deal seems so far apart right now. rich edson following the situation in dc joining us now. rich, what's the latest? >> it does, david, and we have time on this, although it seems like we don't. the two sides, though, fair hi fair apart. the white house proposal on the table, boehner call it a joke. the white house called it magii beans and ferry dust. president obama in the negotiation drew a line he had

yet to draw. >> we're going to have to sew the rates on the 2% go up. we're not going to be able to get deal without it. >> been no deals of this mag magnitude made in congress and forced on reluctant president. i hope the president would turn off the campaign, congratulations, you had a great victory, and let's get serious about dealing with this deficit and debt here at the end of the year. >> back to the president's comments. he had yet before to explicitly say rates had to go up on those earning $250,000 or more. that was the white house position. that is their condition now for a deal. it's in the face of what republicans want saying no rate increases; however, a little wiggle room, and the president didn't rule out a smaller rate increase than he's calling for could be a part of a final product if they get to that stage. lizly thank you very much, rich edson. david: we have a governor who

says his state takes the right action to prevent falling off its own fiscal cliff and the president can learn a lot. liz: joining us now is the iowa governor, and, governor, let us just explain that to the viewers. you deal with a democratic legislature, and you managed to get things done. you could show by example. how have you done it? what do you think inside the beltway crowd is doing wrong here? >> well, they need to get past the politics, quick political posturing, and provide leadership. when i was elected governor again two years ago, i came back because the people of iowa said we need your experience and leadership to get our fiscal house in order. we cut the size and cost of government, and we focused on jobs in ways we can make iowa more competitive. there's a two year budget with a five year projection. i insisted it would stop the bad budgeting practices using one

time money for ongoing expenses, and it was a tough battle, but we got the legislature with a democratic senate and republican house to pass essentially a two-year budget, and we spent just 97% of revenue, even though by law we can go to 99%, we restored the cash reserve in the economic emergency account. the state of iowa in the strongest fiscal position it's been ever. i'm proud of what we accomplished and looking forward to making progress this year reducing property taxes for all property tax classes in our state. david: great progress. so have the citizens of ohio, wisconsin, and you can mention individual states that have done well in getting -- >> indiana, michigan. david: that stands in stark contrast to what's happening inside the beltway. even one of your own, harkin, the united states senator from the great state of iowa said it's better to go off the fiscal cliff than not to have a rise in tax rates, and he said, quooe,

"no deal is better than a bad deal," and a bad deal for him is not letting tax rates go up. what do you think of that? he's one of your own. >> well, unfortunately, we've got too much partisanship in washington, d.c.. the american people want the leaders, both the president and the congress to come together, make the tough decisions. it's going to take both. it's going to take the revenue, but it's also going to take fundamental reform of spending. you cannot spend a billion dollars more than you take in every year or there's fiscal ruin, and with the amount of baby boomers retiring over the next several years, they are going to have to deal with things like medicare, medicaid, and social security if we're going to resolve this thing for the long term, and, frankly, iowa farmers and small businesses will be hit with huge increases in capital gains and death taxes, a real damaging blow to our state, which is doing well.

liz: let's talk about the double whammy you face, and you're only one of six states where it's an interesting situation, interesting or painful, depending how you look at it, that allow residents to deduct federal taxes from their income when filing state tax returns. how would tax hikes affect your state? >> well, first of all, we plan for this. we knew that this was in the law, and consequently, we have enough revenue that if, indeed, the tax rates go up, iowa taxes will go down. iowa taxpayers will benefit. the state will get less revenue, but we can afford to deal with that because we've been fiscally responsible. david: governor terry branstad. you're doing it right. i hope they listen. thank you so much. liz: thank you. >> thank you. liz: i wish he would get there to tell them how to do that in dc. a shallow volatile day in wall street with the dow crossing the

unchanged line more than 70 times. how do invest in the uncertain environment, what one of our guests calls the investment townt of a life -- opportunity of a lifetime. david: wonder what it is. business leaders and congressmen holding a news conference on capital hill today to support a flat tax. remember that? one of the business leaders in attendance was mr. steve forbes, ceo and chairman of forbes media joins us straight ahead to discuss his plan. liz: prolonged drought? still going on in certain places. look at the screen. pictures that may force the mississippi river to shut down, commerce, billions worth of cargo at risk, not shipping right now, grains you eat to oil and coal you use. we'll take you there live. ♪

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david: live, pandora down 20% after hours. came out with numbers the market didn't like, and nicole on the floor for more details.

nicole, what's the reaction? >> right, david, going into closing bell, pandora gained. hopes there was more audience, higher revenues to talk about. it's interesting that they came into the quarter that beat the streak, buttthe outlook, and the current quarter where earnings per share beat five crepts rather than the one cent estimate. revenue beat $117 million. it's the outlook causing the stock to drop 20% in the after hours cutting the full year forecast, and the resultings of the full year well below estimates. as a result, when you talk about it, a lot of people had a lot of high hopes for this one, it's plunging here on a weak outlook. david: thank you. liz: robert, another company fast tracking dividends ahead of test 3 # 1st. >> this takes the cake. remember the benefit series, a special christmas cd every year?

a special dividend based in massachusetts, and they are going to pay eight quarters worth of dividends at once on, you know what else? christmas eve. a dollar a share to all shareholders as of december 14th, and dr. robert, the chairman and founder here, he says the company believes starting in january 2013, the federal tax dividends will be increased substantially if that occurs, cash diff is not a way to reward shareholders. he's the biggest shareholder as 243 # million shares outstanding saving him $600,000 in taxes. david: at least they are not borrowing. >> paying in cash. david: like costco is. they are borrowing $3.5 billion from the future gains so that they don't pay taxes. >> they are not alone. other companies doing it as well, leveraging up.

will shareholders stick around? david: we'll see. interesting times, robert, thank you very much. liz: you're welcome. gridlock in washington triggering volatility in stocks. where do you put your money? david: david lutz, managing direct, and bruno, global exfunds co-founder and ceo. good to see you. fiist, getting right to it because there's an opportunity that you or some see as much as a 50% gain on, and that's a whole country, china. china's been beaten down so much over the past year, that some people are expecting a 50% rally. what do you think about china investment right now? >> i'll tell you, ddve, one thing about china that we noticed is every since the national congress went by them, there was not a stimulus coming from them, the stock market got hammered, even though the economic data gets better. they are one of the worst emerging markets so far year to date. with the lower chains of

stimulus, investors pull out. money going into is the chinese shares. what are the shares? the hong kong proxy for the market. foreign investors, like hedge funds, short the market, and they are covering shorts now. carson black is a short seller bear own china and he covered all the chinese shorts. right now, there's a noted technician out there in the market, tom demark, a lot of the faster hedge funds listen to him. he said yesterday, you know what? there's a good chance of a 50% jump in shanghai composite. david: where do you put your money? >> the best way to play china would be the etf. it's a proxy for the market, but that's because the others out there, you know, they have a lot more of a spread because it's harder to trade the stocks so, you know, the size would trade closer to the index, probably

one of the sharper investors, etfs for investors. liz: bruno, the best idea with the fiscal cliff, you believe the cuts kicking in january 1 # #st, something will happen, there will be a deal. that said, where do you advise people to put your money? >> a generational opportunity with the energy or in the sense that's happening right here in the u.s.. we are going to see tremendous growth from a number of companies particularly on the exploration and production space, and specifically around a fiscal cliff creating short term opportunity with limited partnerships, or mlps, the backbone of a lot of the infrastructure that's being built around the energy in a sense that we're seeing, and we'll see it for years to come, and so a lot of opportunities with a lot of opportunities. liz: opportunity of a lifetime with where it's priced now? >> i certainly say within the u.s. it's the key opportunity,

largest opportunity that we see that's not only short term, but we think it's going to last for several years. david: david, bruno, thank you very much, gentlemen. good suggestions, appreciate it. liz: thanks, guys, a water shortage on the mississippi river threatening to dry business in a big way. could affect you and the stocks you own. jeff flock on the next scene live. ♪

david: time for a speed read of the day's other headlines, five stories in a minute. buffet's claiming up to $1 billion from reinsure over a life insurance deal reached two years ago, reid says the claim is without merit. union management negotiators agreed of federal mitigation to end the week long port strike in los angeles and long beach. they are striking at ten of the 14 terminals at the nation's busiest port complex. apple nearly doubling itunes gee geographical reach with plans to expand into 56 additional companies as apple faces stiff competition from microsoft and google. warren likely to join the banking committee next year, a well-known critic of the banks calling for regulation and limited risk. carl icon abandoning the bid for

oshkosh corporation after just 2 # 2% of the company shares were tended. he sought 25% of the shares in the offer, and that's today's speed read. all right. liz: doesn't usually back out of things. david: he doesn't, but he did. low water levels, threatening to bring the busiest waterway in the u.s. to a screeching halt placing companies that ship grains and other goods at a loss of millions of dollars. liz: jeff is live from the mississippi river to show us the unbelievable situation there. jeff? >> you are looking at stuff, liz, and dave, that you have not seen, rocks not seen in decades. they call those rock pinnacles. look at this. there are no beaches on the mississippi river. well, now, there are beaches. this is normally underwater. the water level is up there. look at what the formations are doing? they are cracking in the sand. it's that draw because of the

draught. the scene on the mighty mississippi, not right now, earlier today, we spent the day on a tow looking at a load of forget laser coming north, so low, they have to reduce the amount of of the barges. we talked to -- tell you, look at the companies affected. companies like monsanto, dow, fertilizers, adm who ships grain. a man who runs a shipping companies along the mississippi who says right now these water levels are killing them. >> efficiencies drawing down in the low river stages, less amount of barges per boat taking more barges and boats to move the same amount of ton. >> it is a difficult situation, and it's getting worse right now. two reasons. one, in addition to the draught, they reduced the flow from the

missouri river coming into the mississippi so they don't have as much water flowing down here, keeping levels up there as well, and, alss, these rock pinnacles coming out of the water, and the ones that are trouble are the ones you can't see because they could be run over and cause tremendous damage. it's a story that's not getting a lot of attention, dave and liz, but it is one that is affecting folks out here. this river could be shut down to traffic within two weeks. david: i had no idea. i had no idea. that's stark tennessee >> it's something. david: wow. thank you. appreciate it. liz: thank you. zumba, just namee inc magazine's company of the year. coming up, zumba's founder and ceo tells us how he keeps the company so fit. try growth of more than 4,000% over just a couple years. david: seeing cameraman dance on this one? liz: a bunch of people. daifd daif okay. plus, businesses concerned tax

hikes are on the way, but there's voices in the wilderness pushing for a flat tax. any hope of reviving tax simplification when it all just seems to be getting more complex? up next, steve forbes, chairman and editor-in-chief of forbes media joining us. ♪ and aantao boot! [ chuckles ] right, baby. oh, sir. that is a stomer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office.

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david: unbeli1vle. continues with ourç complicated tax code about by new taxes andnb risingcatedd[ rates.

may seemúïq a strange time may seemúïq a strange time to talk abouth 6hcj% long time advocates of a élbt tax met withsrepublican for a time when/+ thesplat tax might be taken on. one ol! those at meetingtzv

one, go for the dream, a flat tax. but say in the meantime if we're going to do something serious on the tax code and entightments you will nottdo it before christmas. david: what the republicans could do, they could put up words from the president's own september dwef ven report. in which he says, and i'm quoting from the president right now. principles for tax reform, lower tax rates, the tax system should be simplified and work for all americans with lower individual and

corporate tax rates and fewer brackets. how did he come so far? >>. >> maybe he peaked early. drinking right kool-aid inset of the wrong kool-aid. during the campaign in 2008 when charlie gibson showed them reducing capital-gains taxes inimmediately has increase in revenue he dismissed it and said it is not fair we have to do it my way. david: if in fact that happens. it is what happened. the converse happened when president clinton lowered the capital-gains tax rate from 28 to 20%. we had doubling of income. the government did from capital gains. so it works on both sides. if investment capital begins to dry up. more tend to get less of it. where swill it go. where will all the investment income go. >> it will stay on the sidelines or disappear. financial mark gets go down aa well as up. that is what we're

experiencing now. capital is on strike. much capital is not being created. we see it in western europe. we see it in japan. would apply the same poison here. real people are just debating. how much more burden would we put on already weak economy? david: steve, will republicans cave on the issue of tax rate increases. will they agree with the president and his folks to raise ttx rates? >> the rank-and-file that talk to want to hold fast on that and say, no we're not going to do it. you want to push the economy off the cliff, you're the chief executive. you're supposed to be bringing people together. and put, throw the ball back in his court. david: you think no deal? >> boehner might be willing to do a deal. the rank-and-file wants to hold fast and stick to principle which is rare in washington. david: what is your feeling? do you think we'll go off the cliff? >> i think it will go right to the end. if boehner and senator mcconnell do not cave, i think we'll kick the can down the road.

for once that will be a good thing rather than a bad thing. david: steve forbes, forbes media chairman. >> good to see you, david. david: liz, over to you. liz: they're doing it in churches and cafeteria, ready for a workout. "inc." magazine named sumba fitness the company of the year. we have the ceo of assume ba fitness. we have the fitness instructor. we will combine latin music into a great workout that has grown into a huge empire and what it takes to join in. ♪ .

>> i'm robert gray with your fox business brief. pandora is getting static in after-hours trading on a weaker than expected forecast. it is overshadowing strong third quarter results from the internet radio giant.

2 will be a very special christmas for cognex shareholders. the company is issuing two years worth of dividends joining a slew of companies paying a special dividend by year's end ahead of higher scheduled taxes. a buck a share on christmas eve. the chairman and founder is the biggest individual shareholder. he owns more than a 5 1/2% share. it was a seesaw day down on wall street as investors remain hyper focused on washington and the fiscal cliff negotiations. at the closing bell the dow is down 14 points. modest losses across the board. that is the latest from the fox business network. giving you the power to prosper

our efforts result in ty of care and ice we're able to provide... which means better health outcomes... anmore quality time to share with the onewho matter most. i love you, grandma! [ male announcer ] humana. ♪ liz: every year "inc." magazine comes out with its company of the year and this year it is zumba fitness. citing its business model as a major factor for the success. here with more on the company's growth and future

plans, ceo and cofounder alberto pearlman. what a story with entrepreneural twist that is so amazing. you were a dancer at age eight. >> i wasn't a dancer. perez was the dancer. liz: but you know how to dance now. >> a little bit. but that was not the dancer. liz: how did you simply decide this was an idea that could really get going? >> well, i was having dinner at my parents house and my mom was taking his class. the creator of the class. she was taking his class for 10 years. i never really listened. this time i did listen. she was telling me why don't you meet with him and maybe you can start a business together. so i went to see his class. there were 120 people in his class and all were smiling. it was fitness without sacrifice. this needs to be scaled because the country and the world needs something like this. my passion is entrepreneurship. i've been an entrepreneur since i was five years old. i was renting my watch to my

classmates. as i said what if i could take these instructors and train instructors and turn them into entrepreneurs? liz: so licensing the zumba idea? >> yes. yes. liz: from that we should tell our viewers you now have a clothing line. you've got audiotapes. you've got dvd's. you have got an unbelievable growth opportunity here that during the early years saw 4,000% growth, correct? >> yes. listen, we have, we launched the music city this year. we launched two music cds this year. both went platinum. clothing line will sell 3.5 million units. not dollars. pieces of apparel in the website. that is raising eyebrows all over the apparel industry. liz: as we see some of the numbers, i love to go back to the video, seeing people do it, the important point to be made you don't have to have a gym. doesn't have to be like that. you could do it in a church. do it in a cafeteria.

do it in a synagogue basement, whatever you can do it anywhere. which brings me to this question. government regulation, has that ever tricked you up? is it more onerous now and how dii you overcome it? >> not really. liz: never a problem? >> government is pretty lax on the fitness industry. there are fitness certifying bodies. we encourage all the instructors to certify american council on exercise and american fitness. it is all good. liz: speaking of struggletores she is here with me on the set. i was a jane fonda. there are billy blanks. there are a million ideas out there. how do you keep i guess, the venture-capitalist monee behind you. you've got millions and millions in vc money when there are ideas coming up from behind? >> the good thing about zumba, we created open source fitness. as long as anybody likes to dance there will be zumba

classes. we were born dancing two years old, we start dancing. there is new dances and new moves and new evolution of music. we just incorporated it into zumba. liz: ipo? >> it's, never out of the question but we have one lens that we look through, does it help the instructors. if it helps the instructors we will do it but just through that lens we look at everything. liz: alberto perlman, a amazing story. great success to you. >> thank you, liz. liz: interesting to note that ink picked not a silicon valley company as company. year but zumba. they keep their eye on all different ideas. david: absolutely. good to see them making a good go of it. we should have more of the dancing. next the not so simple rules of collecting the health care sir tax. what is in a name? could a free burger at red robin be up your alley. we'll tell you who qualifies on the house today.

let's see more of the dancing before we go. grab that camera.

liz: you may be paying more taxes on investment income

in 2013. tomorrow, the irs, internal revenue service, is releasing 159 pages worth of rules for a new surtax but the regulations remain unclear. david: i love how you have almost 200 pages for one new tax. liz macdonald has been looking at the tax situation for years now. has been delving into this one. what have you found? >> this will be put out for public comment. this will be put in the public register. not that the public can do anything about it. they will just do it. also the case with congress, they pass a law and the irs has to handle it. you can imagine it will start blowing the circuits at the irs on this thing. it is a tax on top of a tax. it is surtax. a brand new form taxpayers will be hit with. 159 pages of rules might be even higher than that. they're still deciding whether to slap this tax on rental income. that is now a big debate. david: i hadn't heard that. >> that would be a big news

item if congress decides to do that. it is 159 pages of rules because it covers, stocks, bonds, derivatives, commodities, all sorts of trades. they will be not so tough to go to. it is pretty clear. but just one other thing you have to be aware of. while the irs is saying they won't hit you with penalties in obamacare for the new taxes but they can with hold your refund or ding your refund. that can be annoying. my guys at irs says they will have to digest obamacare. irs is having one to deal with. circuits will be blown at agency as this gradually comes online. 3.8% surtax on cap gains and dividends will be possibly more than 159 pages of rules. we don't know whether we'll hit rental income. david: i digested it but i have heartburn. liz macdonald, great to see you..3 >> sure. thank you, liz. david: cashing in on the

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liz: take it off the deck. think you know what kate william and kate middleton are having a boy or a little girl. gambling has started on british web sites. you can bet on the length of kate's labor. they are up for grabs. according to the guardian, nine to one for names francis and john. 10 to one of victoria. family names of george and diana are also favorites. david: off the desk, if your name is jim today is your lucky day. the restaurant chain red robin is celebrating jim day, giving a jim beam bacon burger to any customer that can eat it or, no, to anybody named jim or jamie. if you live on jim street or variation of the popular name, you're elgible for a free burger. liz: we talk about things to watch. the reaso